Of all the IP lawyers I know who are openly advocating for radical changes in the copyright system, William Patry is the only one who is not afraid to dig deep. Instead of founding his arguments upon novel interpretations of some obscure subparagraphs of legislative provisions or dictas in 18th century case law, Patry starts where any meaningful discussion about copyright should start – with the question why, why do we have copyright laws at all.

While I vehemently disagree with his conclusions and proposals, I have tremendous respect for Mr. Patry because, unlike most of those who agree with the substance of his proposals, he openly declares his goals and reasons, not hiding behind some illusory goal of pleasing everybody. It is an honour to have such an opponent in this philosophical debate.

William Patry has recently published his new book, “How to Fix Copyright”. In it he explains why today’s copyright laws make no sense, goes back to the foundations of copyright and asks the inevitable question why, offers an answer to that question and makes several proposals based on that answer.

Ironically, I tend to agree with most of what Patry wrote in his book. A great deal of it is nothing but brilliant and very useful. In fact, I wholeheartedly recommend it to both supporters of “stronger” copyright laws and destroyers of copyright.

As I mentioned, I disagree with Patry’s answer to the why question and, subsequently, to his proposals with respect to how copyright should be fixed. In this review, I will first briefly outline my fundamental disagreements with Mr. Patry and then illustrate them with examples from his book.

Big problems with Patry’s position

There are several big problems that I see in Patry’s position.

The most important one is that he believes that the reason for existence of copyright laws is to benefit the public the most. I have been saying this for years: copyright laws can only exist for one of two reasons: either they focus on protecting the interests of creators and investors while disregarding the potential consequences for the public; or they focus on protecting the interests of the public while providing to creators and investors the minimal level of protection required to ensure that the public has the most amount of new works to consume.

The idea of balancing these interests is insane, even though it became mainstream. I am well known for comparing it to an attempt to balance the interests of rapists and their victims in a single piece of legislation – it just doesn’t work that way… I will be returning to this metaphor throughout this article. If you feel offended, stop reading.

The reason I respect Patry’s position so much is that he understands that the balance model is nonsensical. The reason I disagree with Patry is that in this resulting dilemma between protecting the public or the creators, he sides with the public.

Patry is in fact advocating for the Soviet model of copyright law where creators had no control over the use of their works and were only entitled to “fair” remuneration. As I wrote in my article, “Copyright and the Great Socialist Degradation”, authors created many great works in the Soviet times. Lack of exclusive right to control the use of one’s works, as Patry rightly notices, does not necessarily cause authors to abstain from creating. The problem with this, of course, is, in the words of Ayn Rand, “the man who produces while others dispose of his product, is a slave”. By taking away from the copyright owners to right to decide on what terms their works are to be used by the public, we are essentially enslaving them.

Secondly, Patry correctly makes a distinction between what the laws are and what the laws should be (in hid opinion). He understands that in order to get to the a destination, one cannot rely on the laws as they are today. He is not afraid to offer suggestions that go beyond attempts to reinterpret the existing norms. Yes, somehow he draws support from old copyright laws, such as Statute of Anne, when it tends to benefit his position.

I have two issues with this approach. You cannot have it both ways. Either we disregard all existing and past laws in the search of the perfect solution, or we are bound by such existing and past laws. Relying on provisions of the 1710 act as the basis for one’s proposals in 2012 is no more genuine than claiming that whatever laws that are in existence today are the way they should remain for the next 300 years. On the other hand, one should not forget that the Statute of Anne was adopted in the pre-Adam Smith era of capitalism, when individual rights and freedoms meant little and when the laws were but a system of privileges granted to groups and individuals. To look to these laws for guidance as to the fundamental principles of today’s copyright is no more genuine than using slavery laws as the inspiration for today’s employment standards.

Thirdly, while Patry correctly states that law is not the solution to business problems, he at the same time advocates that the new laws he suggests will be a good way to force businesses to adopt “good” business models to replace the awful retrograde business models that copyright owners around the world currently use in reliance on the outdated copyright laws. Again, you cannot have it both ways.

You don’t fix broken business models by stealing from those who attempt to run them. Free markets do a much better job at educating those whose business models are antiquated. As I explained in my article “Failed Business Models of the Past, Eh?”, piracy distorts the markets and prevents businesses relying on traditional copyright models from properly evaluating their viability.

Fourthly, Patry’s proposals are based on the assumption that today’s laws somehow prevent businesses from adopting “good” business models. They don’t. Everyone is free to relinquish control over the use of their works, and many have done so. Just because someone is prepared to give up control does not mean that the right to control should be taken away from others by force. Just because someone may be willing to pay more in taxes does not mean that everybody else should be taxed more. Even is someone (even a great majority) is prepared to sacrifice their firstborns in the name of some “higher” purpose does not mean that those who do not should be forced to do the same.

These are the big points on which we disagree. Below, I will illustrate this with specific examples from Patry’s book.read more…

This is a repost of my article that I published at MINCOV.COM on June 23, 2010.

As negotiations over the Anti-Counterfeiting Trade Agreement (ACTA) progress and more and more information becomes available on the potential wording of the agreement, the usual suspects from all camps are happy to share their views on how ACTA might influence our lives. Quite expectedly, the opinions range from alarmist to pacifying, from wholly positive to Armageddonist, from neutral with a tint of “it’s not going far enough” to neutral with a “they’re still not gonna get us” tongue-in-cheek attitude.

How is it possible that one and the same document can attract such radically differing opinions from indisputably educated and intelligent people? The answer is simple. No assessment of a draft international agreement (or any piece of legislation) is possible in abstraction from the values against which such agreement is to be gauged by the assessor.

This is the reason why any legislation regulating welfare handouts is usually subject to heated debates: the same piece of legislation would necessarily receive incompatible ratings from human rights activists, union leaders, free market economists, those who are to distribute the handouts, the homeless, the working poor or the uber-rich. This happens because everyone has their own system of values, however consistent, and it is through the prism of these values that one evaluates all existing or proposed rules.

It is one’s system of values that allows one to rank various interests in the order of their importance. What is more important – saving a life of someone else’s child or the ability to buy a new toy for one’s own child; establishing higher wages for auto workers at the expense of car buyers or bringing down car prices at the expense of auto workers’ wages; saving an unbeknown species at the expense of a local industry or the prosperity of the industry workers – even if it means extinction of the species; protecting the rights of authors in a way that may result in severe limitations of availability of certain works or protecting the “rights” of “the public” to a rich cultural life at the expense of creators’ freedom to dictate the terms of use of their works?

The answer to all of these questions is – it depends. It depends on the system of values of the person who is to answer these questions. Any attempt to convince others in the “objective rightness” of one’s answers is nothing more than an attempt to inculcate or force one’s system of values upon others. An attempt to find a compromise under the guise of objectivity is either a reflection of one’s subjective system of values or an attempt to shift the Overton window1. so that one of the conflicting values is marginalized as “too much” and the other one gains weight as the window slowly shifts in its direction. I have already provided one Ayn Rand’s quote about the compromise between food and poison in my recent article, Modernization of the Inconceivable. Here is another one:

“The good has nothing to gain from … the evil, except a share of its failures and crimes; the [evil] has everything to gain from the [good]: a share of its achievements and values. An industrialist does not need the help of a burglar in order to succeed; a burglar needs the industrialist’s achievement in order to exist at all. What collaboration is possible between them and to what end?”2..

In the beginning, I had no reservations about ACTA, other than that it would probably not go far enough in establishing a system that would provide an efficient mechanism of enforcement against mass violations of copyright on the Internet. I had no problem dismissing most comments from scholars known for their focus on the so called “user rights” – simply because they are based on the system of values that is irreconcilable with mine.

However, after I spent some time getting myself familiar with various opinions on ACTA, I realized that the one problem I do have with ACTA is that it can be used as a tool to set up global regulation of the Internet going far beyond the framework against copyright infringements.

The idea that the international agreement that seemingly could provide enhanced level of protection to copyright owners whose works are being used on the Internet could also become a tool of oppression (and by oppression I do not mean one’s inability to download a new movie free of charge), seemed like an irreconcilable contradiction. Then again, Ayn Rand’s philosophy came to the rescue. In “Atlas Shrugged”, she wrote: “Contradictions do not exist. Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong.”

This is exactly what I did.

Let me start with setting up the framework of my system of values and beliefs in this regard.

1. Individual rights are an absolute priority. A society that does not fully protect individual rights is a society of masters (whether the master is a dictator or the majority) and slaves.

a. Individual rights are impossible without property.

b. Intellectual property, as a result of one’s creative labour, is no less property than any other type of property.

c. Unlike in the case of tangible property, there is no way to physically prevent infringement of intellectual property.

d. If the infringement of intellectual property does occur and is not voluntarily remedied by the violator, the only recourse the owner of the intellectual property may have against the violator would be through the use of coercive force applied towards the violator – which may either be the force applied by the state (through courts and various enforcement procedures) or by the owner of the intellectual property and its agents (i.e. thugs or journalists).

2. The government’s only proper roles are those designed to protect individual rights through monopoly use of coercive force, i.e. the military, the police and the courts.

a. More government involvement and regulations based on protection of interests of some people or groups at the expense of some others means less freedom to all but the ruling clique.

b. Individual rights cannot be voted away by the majority, no matter how overwhelming.

c. Totalitarianism is totalitarianism, regardless of any allegedly virtuous purposes for which it is being instituted. The state does not have to be run by a murderous dictator for the individuals in that society to not be free. What distinguishes totalitarianism (as the ultimate form of statism) from a free society is that it holds a mortgage on its subjects’ property and lives by sacrificing them to a mysterious common good. The difference between a mixed economy and full totalitarianism is only a difference of degree in lack of freedom. Laissez-faire capitalism, with its recognition of individual rights as the ultimate virtue, is the only truly moral politico-economic system that does not sacrifice, under the barrel of the gun of the government’s enforcement machine, the rights of individuals to the interests of others (be it the dictator, a bureaucrat, a particular group in the society, or the “public” in general).

d. While a big government involved in roles improper for the government is bad enough, a global government is disastrous.

3. Given the ease of dissemination of unauthorized content on the Internet and impracticality of initiating a full-blown litigation over each case of infringement, the only sensible solution, if we are to deal with Internet piracy, is through cooperation of ISPs (both hosting providers and Internet connectivity providers).

4. To create a truly totalitarian state or a global government today, the Internet would necessarily need to be heavily regulated, hence the attempts to force net neutrality down our throats.

a. No totalitarian state has existed without drastically limiting freedom of speech or without serious invasion of private lives of the state’s subjects.

b. A system that allows to control ISPs for the purpose of enforcing intellectual property rights can easily be used to impose overreaching control over the Internet.

5. Internet, as any great invention, can be used for good purposes and for bad purposes. Regulation of the Internet can also be done for good and evil purposes.

6. Ends do not justify the means. It is impossible to save the free market system by abandoning free market principles, President George W. Bush to the contrary notwithstanding1..

So why does there seem to be a contradiction? Those who have read my article, Modernization of the Inconceivable, might have already figured it out. The main problem with ACTA is that it is based on a compromise of underlying principles. Just as a legislative attempt to balance interests of factory owners with those of looters who openly steal from the factory, is nothing more than institutionalized racketeering, an attempt to appease those who claim that they are entitled to “share” the cultural legacy by downloading, without authorization, any packages of ones and zeros, is nothing more than enslavement of creators (and those with whom creators voluntarily trade) by forcing them to give up the product of their labour and investment on terms that are dictated by someone else.

Until the proposed international agreement clearly states that the protection of intellectual property, as its underlying principle, is undertaken for the benefit of whose who create it and invest in it and that it has nothing to do with the interests of the whole “society”, we are doomed to witness the war between various groups lobbying their interests. When the use of one’s property is subjected to undefined interests of the “society”, one is neither the owner nor a free man. If a person is only allowed to have a private home if the society finds it beneficial, then under the same logic, the society can always expropriate the house, if it should find, through an activist claiming to represent the interests of the society, that expropriation would benefit the society even more. This is precisely what happened in the Soviet Russia where if the place you lived at was more spaceous than 9 sq. meters (97 sq. feet) per person, you were considered too rich and the government had the right to let strangers into your “communal” apartment. When it is up to the society (through its elected or self proclaimed representatives) to decide who should own what, one is merely a slave whose property can be taken away at any time in order to meet the demand of the public.

As long as the mechanics of the proposed agreement are designed with the interests of the collective in mind, there will always remain a risk that the enforcement tools created by the agreement will be used for unrelated purposes that are, as will be claimed, equally as important to the society. If even a partial justification for establishing the rules for ISP liability is that it would promote the public interest in the encouragement and dissemination of works of art2., then there is no reason not to use the same system of ISP liability with respect to dissemination of extremist speech, the definition of extremism being, naturally, left to the discretion of anybody who will claim that shutting down of a particular opposing view is in the interests of the country.

That is the problem with the current wording of ACTA, not that lobbyists from the recording industry cannot come to terms with lobbyists from the electronic gadgets industry; or that both these groups are vehemently opposed by activists of the “masses are (or should be) entitled to use copyrighted works as they please” movement. The problem is that because ACTA does not clearly establish the notion that the only concern for protection of intellectual property is the creator and subsequent voluntary investors in the creator’s work, the treaty members are not precluded from approaching the issue of such protection from the perspective of the “common good”, thus allowing a dubious compromise between two conflicting philosophies.

That ACTA has more chances of being implemented in the world because of its wording being vague enough to accommodate irreconcilable interpretations, is not good enough. If one scholar says that ACTA establishes a three-strikes-you’re-out rule and another scholar says that all it does is that it confirms contributory liability of ISPs, which liability is lifted subject to the ISP’s reasonable cooperation, it means that the same text may equally reasonably be interpreted as providing a global government with a tool of shutting off dissent and establishing total control over who does what on the Internet. What is attempted to be sold as a virtue of ACTA, that it offers a balanced approach to various groups of interests, is precisely its most important flaw.

As soon as the treaty’s purpose becomes to establish a fair balance of interests (based on whichever group succeeds at extorting favours from the drafters and other parties), the implementation of the treaty would always lie in the domain of re-evaluation of what balance is “fair” under the circumstances (the circumstances being, of course, the relative power of various interest groups in a particular country at a particular time). This is nothing more than warfare between various gangs as to which one of them has more power over the others.

Those who understand the importance of intellectual property should not lull themselves into believing that everything is going their way simply because lobbyists from their camp succeeded at squeezing in a rule that would tip the balance in their favour. As long as the protection is not based on a morally consistent principle, there is no guarantee that the balance will not tip the other way tomorrow or that the enforcement mechanism created by ACTA is not used for purposes radically different from those that it will have been introduced for.

The only way to ensure that an international treaty provides a solution to combat Internet piracy without becoming a tool of oppression is to so word the treaty that it would not leave any doubt as to the reasons why intellectual property is granted protection. And that reason should be stated clearly and proudly – intellectual property is being protected because no one has a right to use the results of another’s creative labour, other than on terms put forward by the creator or the subsequent copyright owner who voluntarily purchases said rights from the creator. It has nothing to do with whether the society benefits from such protection.

Unless the collective interest is left out of the equation, there will always remain a risk of this collective interest being used to enslave everyone into submission to whoever claims to be the representative of the society at any given moment. This is precisely the way all collectivist dictatorships of the past have seized power. It should not be forgotten that no dictator has come to power on the promises to murder millions of citizens in their own country. All the atrocities of collectivist regimes (be it Lenin, Stalin, Hitler, Mussolini, Mao, Khmers Rouges, Che or other blood-thirsty monsters) that are presently being laundered by the left, have been accomplished in the name of the common good.

I am not saying that ACTA will necessarily lead to the world holocaust. What I am saying is that the lack of clarity in the reasons for its adoption would make both IP supporters and haters guilty in the demise of our freedoms. The difference, however, is that the haters’ goal is clear – they openly advocate for the submission of creators and investors to the interests of the “society”. It is the position of many IP supporters that is most inglorious: by trying to carve out a piece of the pie for creators, they are prepared to do away with the philosophical basis for the protection. By throwing the creators to the mercy of the collective, even if it benefits the creators in the short run, all that they are achieving is that the paradigm slowly shifts to the one that IP haters embrace – that there should be no protection other than that which benefits the society as a whole.

This is a repost of my article that I published at MINCOV.COM on June 9, 2010.

In my article “Why Courts Should Not Allow the Parody Exception to Make a Parody of the Copyright Law”, I shared my view on why I believe that the circumstances in which one should be permitted to use a preexisting work, without authorization, for the purposes of parody, should be extremely limited. That article was based on a law suit brought by J.D. Salinger against a Swedish author whose work was a blatant attempt to parasite on a famous work.

Through a weird and symbolic coincidence, on the same day when the Canadian Government tabled the Copyright Modernization Act that includes the controversial “parody and satire” exception, LatmaTV posted on YouTube a parody ridiculing the support that the world is offering to the so-called “peaceful” Free Gaza flotilla.

To me, it was the perfect opportunity to test my own convictions, for the reasons that follow below.

1. I believe that it is a brilliant parody.

2. I believe that the cause behind the parody is righteous and deserving of support.

3. I recognize that a lot of work and creativity must have gone to create the parody (write the lyrics, distribute roles, record the song and shoot the video) and that it has great transformative value.

4. I believe that freedom of expression (speech) is of utmost importance.

5. Because I like the parody and because I think it serves the right cause, I have an urge to allow as many people to see it.

6. It is not inconceivable that the values of those who took part in creation of the original “We Are The World” video and of those who currently own the rights in the original song and in the original video would hold views that are diametrically opposed to those who call for public condemnation of Hamas and for support of Israel.

The question I asked myself was, if I was a judge who was not restricted either by the parody exception or by its absence, with all the views that I hold, if I was to decide on a claim of copyright infringement by the copyright owners against the parody makers, requesting a permanent injunction that could magically be so efficiently enforced throughout the Internet and other media, that I would cause the parody to become completely inaccessible worldwide forever if I decided that the parody was infringing – how would I decide the case?

I must admit that these were some terrible moments when I was trying to reconcile my seemingly opposing principles by trying to find a middle ground. However, I did not engage in this enterprise to look for easy answers. That is why I made sure that I could not get away with pronouncing the parody to be an infringement in the hope that my decision could not be efficiently enforced, so I could allow the parody makers a chance to look as heroes going against the system twice – first, by opposing the Israel-hating world, and second, by opposing copyright laws that tend to protect “the wrong people”. Hence the requirement that if I rule in favour of the copyright owner, then – without regard to additional requirements that usually surround granting of injunctions – I should erase the parody from existence, forever.

Finally, I convinced myself to disregard the issue of where I stand politically on the flotilla issue, and to return to the principles.

In principle, I agree with the decision in Michelin1., where the Federal court cited New Brunswick Broadcasting Co. Ltd. v. CRTC2., in which Justice Thurlow wrote:

“The freedom guaranteed by the Charter is a freedom to express and communicate ideas without restraint, whether orally or in print or by other means of communication. It is not a freedom to use someone else's property to do so. It gives no right to anyone to use someone else's land or platform to make a speech, or someone else's printing press to publish his ideas.”

No one's freedom of expression should trump individual rights (including property rights) of others. It would not be a justification for a terrorist who had taken hostages to claim that he only did so to tell the world about whatever cause he is pursuing, even though it is arguably one of the most efficient ways to make the world listen. It would not be a justification for an activist who set someone's car on fire to claim that he only did it to demonstrate his inner convictions of the evils of capitalism. In the same vein, using someone's intellectual property should not be justified by whatever noble political ends that the unauthorized user is pursuing.

On the other hand, as many have rightfully noted, using someone's work does not destroy it (as in the case of a burnt car) and may not necessarily have any serious consequences for the copyright owner (as would be in the case of being taken hostage). Should this change anything?

I would say that if it changes anything, it would be the degree of moral justification for the copyright owner to make a claim that would stifle the parody. Everyone should be justified to ask that the copyright owner not make the claim and to act accordingly (by exposing the copyright owner's viciousness, by instituting private boycotts or otherwise), if the owner does nevertheless make such a claim.

But once that claim is made, in other words, once the copyright owner has decided that his rights to the preexisting works are more important to him compared to the public outrage that would ensue, the copyright owner's claim should be no different from the claim of a burnt car's owner.

If I were to write the decision in such a case and if I were not bound by existing laws but only by my philosophy, this is what I would say:

“It is beyond reproachful that the copyright owners should wish to stifle such a socially important parody, but it is their right to determine the terms on which their property is used by others, and I have no choice but to grant the permanent injunction.”

This is a repost of my article that I published at MINCOV.COM May 30, 2010.

In case of dissemination of music, movies, software, books or other works of copyright (I will refer to them as Content), business models are nothing but an interface between Creators and the public. I will be using the term Creator to refer to a natural person in result of whose intellectual and creative efforts Content is created, even if according to applicable law, the first owner of copyright in the Content is some other person. I will be using the term Owner to refer to the current owner of copyright in Content.

A model may only be successful if it meets the needs of Creators, the public and those who provide the interface. Buyers always want to pay as little as possible for the best product available, while the sellers always try to maximize their profits. What makes a business model successful is that it provides an equilibrium between the desires of buyers and sellers.

Also, one successful business model should not necessarily replace all others. Different products require different business models. It would be preposterous if manufacturers of luxury cars used the same business model as manufacturers of toothpaste, even though both manufacturers share the same ultimate goal of maximizing their profits. However, no one seriously suggests that Maybach should be forced to produce millions of cars and sell them cheap. Likewise, no one is forcing Colgate to only manufacture elite sorts of toothpaste and sell it on auctions for several hundred thousands of dollars per tube. If Maybach suddenly realizes that no one wishes to buy their Excelero for $8 Million1., it may reconsider whether it is a good business model. But it will surely not be making these amazing cars if a gang confiscates every new car at the gate of the factory, sells these cars on eBay for a few hundred dollars and then calls it a “new business model” that the greedy and old-fashioned car manufacturer “needs to embrace”.

The term “buyer’s market” refers to a situation when there are more sellers than buyers on the market, which leads to lower prices due to the excess of supply over demand. This term does not refer to hordes of “buyers” breaking stores’ windows and grabbing whatever they want, should the store set prices that the “buyers” do not find agreeable.

Forcing new business models is the same as attempting to force democracy upon Iran. Even if this latter works, which I do not believe is possible, there will still be thousands of people who will honestly think that the Western world ruined a great country, broke its spirit to replace it with a world of greed, evil and vice. Just as thousands of Russians still believe that attempts of Western democracies to educate Soviet people about freedoms were the cause of despicable economic state of Russia in the 1990s when oil prices plummeted. Many Russians still believe (which feeling is successfully being exploited by the government) that the only “real” objective of whatever (literally, every single thing) the West has been doing is to bring Russia down to its knees.

Soviet Union should have been allowed to fail and through its complete failure, seen from the inside, and not only from the outside, to adopt a new model that works2.. Otherwise, as soon as oil prices went up, new Russian leaders began rebuilding the old system claiming that the only reason why the Soviet Union experienced “temporary problems” was because of the forceful imposition of an extraneous ideology. Attempts to save someone who does not realize that they need to be saved or even someone who knowingly resists such “salvation”, will never succeed. For the same reason, refusal of the West to let the Soviet Union rot and fail, allowed the bankrupt socialist and communist ideas to outlive their most successful practical embodiment, because those who support these ideas now have an argument that these ideas failed because of the intervention on pernicious free market ideology. It has always been the tool of collectivists and statists to blame their victim (free, laissez-faire capitalism) for their own misdoings and then offer the same poison they used to bring about the problem they were trying to “fix” as a remedy.

Proponents of “copyright to the masses” ideas keep going back to the same examples over and over and over again, the most popular being one of the movie industry’s war against the VCR, claiming that in the end of the day, it was the VCRs that saved the movie industry3.. The question is – did the movie industry need to be saved? Did the manufacturers of VCRs have an obligation to save Hollywood?

If advocates of the use of VCRs were so confident in superiority of their business model, they should have created a case where VCRs were primarily (or, ideally, exclusively) used for Content provided by those Owners who agreed to having their Content so used. This, however, never happened. “Old” movie industry gave in, had to accept VCRs as part of the new landscape, and immediately went back to its old model, subject to necessary changes. This is because it had never been given a chance to regard the advent of the VCRs as anything but the necessary evil, a chance to truly appreciate numerous features that allowed the industry to benefit from the VCRs after the movie industry lost its battle to VCR manufacturers. Forced adoption of a model that the movie industry tried to resist may have saved the industry, but it never became the industry’s conscious and voluntary decision. And the choice that the industry was facing was not a choice between the old model and the new model. It was a choice between mass disregard of the public to the way the industry wanted to run the business and the new model. It was surrender, not embracing of the new model. If the major element of the “old” industries is described, as William Patry does, as control4., the industries’ surrender to the new model did not dissuade them of the idea that control is a virtue. Being force-fed the new business model and unwilling to see their old model’s flaws, they kept trying to retain as much of their old model as possible. The history kept repeating itself with VCRs, TV, DVDs, the Internet. Instead of letting the industries fail and learn from their failure, the innovators consistently went against the old industries’ wishes and forced new models upon them and kept calling this “salvation of industries running old failed models”.

Yes, maybe if VCR manufacturers would have had to wait before the movie industry realized the potential benefits of the new technology, thus delaying the advent of the VCR. But, assuming that the new model was indeed better, it would have created a completely different landscape of industries embracing the strengths of the new models rather than trying to minimize their impact on the existing models.

Also, one must not forget that VCRs, as any other interface between Content and end-users, only have a meaningful use if there exists Content that they can record or play back. Give a VCR to a caveman in absence of TV broadcasts and other audiovisual Content (even assuming that the caveman will have electricity and a television set), and the VCR will be completely useless, a pile of metal and plastic. It is the Content that gives value to the VCR.

Patry writes:

“Consumers are king – not control, not copyright, and not content. Without consumers, copyrights and content have no economic value. Copyright is not fairy dust, vesting everything is touches with magical economic value. Rather, economic value is derived from buyers’ willingness to pay for a product or service.”5.

However, this does not address the issue of piracy. If consumers, instead of buying Content, are accessing it in circumvention of the Owners’ terms, it does not mean that the value of the Content is nil. Just like stealing of a car, which essentially means the particular “customer’s” refusal to buy it, does not mean that the car’s value is zero. If it proves anything, then it is that the mere fact that Content gets pirated means that it has value, however, through various mechanisms, looters of sorts6. have an option to override the necessity to pay the price.

“I had always thought that a consumer was someone who legitimately acquires some good or service for that person’s own use. However, the “consumers’ referred to by the coalition [of those who oppose ACTA] appear to be those individuals who engage in repeated acts of copyright infringement despite repeated warnings to stop. So, is the moral fight against the substance of ACTA’s proposed provisions related to graduated response by these detractions really about defending the right to take the creative labour and investments of creative individuals and industries for free?”7.

I share the view of Justice Peterson, who in University of London Press, Limited v. University Tutorial Press, Limited8. wrote: “after all, there remains the rough practical test that what is worth copying is prima facie worth protecting”. If it is worth someone’s efforts to steal, it has a value, even if no one buys it.

Crusaders should not expect to be embraced and to have their views that they attempt to forcefully impose on their victims, celebrated. Unless the sole interest of new model missionaries is in the mere sadistic process of forceful imposition of their ideas unto those who resist them, there are only two interrelated ways to efficiently reach the objective of conversion: to let the “old” models fail without any external pressure, simply by allowing them to rot by themselves, unable to provide something useful enough to keep them afloat9.; and to recruit new adepts by demonstrating the superiority of new models, without any violation of terms established by those who prefer to keep running the old models. This is the only way to have a controlled experiment, the only way to objectively prove that one system is better than the other.

Let us compare this situation with a restaurant that charges exorbitant amounts for its good food, but has less and less customers because of its conservative and somewhat extravagant policies. For example, it only allows men in blue suits and red ties and it only allows women wearing white dresses and red high heel shoes, and requires them to dance before they are permitted to enter the premises. But the food is great. And very expensive. Let us assume that most people find this approach ridiculously preposterous, that the business model of the restaurant owners is wrong and disastrous. Let us assume that it indeed is wrong and disastrous.

By analogy, what the proponents of forced new business models would suggest is to have as many people come to the restaurant, without regard to the limitations to the dress-code that the owners are trying to impose, eat and refuse to pay, claiming that the restaurant owner’s policies are unfair, inconsistent, discriminating, unenforceable, irrational and immoral. This approach is clearly wrong and will never convince the restaurant owner of anything other than he is being assaulted by a lawless gang.

The reason why Montgomery Bus Boycott was so successful during the segregation was that the protest did not involve violation of anyone’s individual rights. Black people did not force a free bus ride under the pretence of fighting against segregation, they boycotted the public transportation, which resulted in serious economic consequences for the public transport system. Feel the difference.

There are several other ways to prove the point, assuming that we are right.

The easiest would be to campaign that people not go to that restaurant. Yes, refuse to eat there – at all, for free or for money. In case of copyright this means – don’t buy and don’t use Content unless it is legally offered to you under conditions you find acceptable. No one has an inherent right to use someone else's works. Just as “public property” and “public interest” are misnomers referring to notions that do not exist, there is no such thing as “users' rights”10..

Another solution is – convince the chef to leave the place and work for you. It is the chef who makes good food, not the restaurant owner. Restaurant owner simply provides a business model, the interface, that we find unfair. If our model is so much better, it should not be a problem to convince the cook to work for us, should it? The cook here, of course, is the Creator. Instead of pouting that the lion’s share of the profits goes past the Creator and instead of sabotaging the business of those whose business models we do not like, convince the Creator that they will be better off under our modernized model. Without a good cook, how is the restaurant to survive? And if we have a great cook and a superior business model, is it not the key to success?

Yet another solution is – buy the restaurant off from its current owners. If we are so sure that our model is better, that the cook is going to stay with us, that we are going to have so much more customers if we change the model and that we are still going to be able to make more money, why don’t we buy the restaurant off?

If someone invents a miraculous vaccine that most people are reluctant to use for some reason, even if the inventor knows for a fact that the yet untested vaccine will “make the world a better place”, he has no right to forcefully inject it to people who do not want to use it. Even if the only reason why the inventor is doing it is that he is trying to save people’s lives, he is still violating their right to refuse treatment. Instead of finding several hopelessly ill who would happily agree to take the treatment and thus convince everyone that the vaccine works, forceful injection destroys any possibility of a controlled experiment, because “patients” are going to resist treatment.

We do not need to save businesses with old business models. If they are bound to fail, we must let them fail. It is their right to be able to fail. We must not forcefully save them by breaking the laws in the hope that they will somehow adopt a new business model and be grateful to us till the end of their days.

This is a repost of my article that I published at MINCOV.COM April 27, 2010.

Ever since I started practicing in the field of intellectual property law, I have been an avid supporter of stronger copyright laws, in the sense that the law should provide an efficient tool for the owner of intellectual property to control its use by others, to the point of being able to legally prevent its unauthorized use altogether. For greater clarity, I do not differentiate between the need to protect the rights of authors and of subsequent owners of copyright, as long as the authors were not compelled to assign their rights by force.

Seeing where the world is going to, particularly in terms of piracy, I was becoming increasingly sad, thinking that the system of copyright is being systematically destroyed. It is easy to see why the collapse of intellectual property laws would be welcomed by those who engage in unauthorized use of others’ works, but I had been struggling to understand why the idea of significant curtailment of authors’ rights in favour of “the public” also finds its proponents among many prominent scholars1., who do not necessarily fit into the category of people downloading movies off torrent websites.

Only a few months ago, did the pieces of the puzzle come together for me. Only a few months ago did I realize that the current attack on copyright is simply a part of a larger picture. In this article, I will provide a simplified overview of the mental process that I went through to see the big picture.

It all started when, for various reasons, I had to do some research on a fundamental issue that most practicing lawyers (myself included, until recently) tend to treat as insignificant or too obvious. The issue is the one of the nature and justifications of copyright. Why do we have copyright laws at all?

From the inception of copyright, there have been two competing points of view on this.

According to one, rights to results of one’s creative activity come from God, or otherwise from the nature of man, or are otherwise akin to property rights. One of the most famous quotes reflecting this first approach belongs to Jean Le Chapelier. In 1791 in the Paris Assembly he said: “The most sacred, most personal of all the properties, is the work fruit of the thought of a writer […] so it is extremely just that the men who cultivate the field of thought enjoy some fruits from their work, it is essential that during their life and a few years after their death, nobody can dispose of the product of their genius, without their consent”2.. According to this approach, copyright laws are nothing more than a reflection of objective law that only requires the government to provide the means of its enforcement.

The second approach is to say that but for the grant from the government, authors have no rights. These rights are said to be granted by the government for the “public good”. Governments are prepared to tolerate authors having some rights, but only to the extent that it benefits the public. And as with any entitlement coming from the government, whatever the government gives, it can always take away.

Historically, the problem has been that proponents of each of these approaches tried to push forward their ideas by masking them behind ideas of their opponents. This resulted in a situation where none of the arguments actually made any sense.

Proponents of God-given theory tried to give as much protection to authors and at the same time to appease the proponents of the public good theory by claiming that the reason that monopoly rights should be granted to creator was because such monopoly rights would in fact benefit the society as a whole. But if the right is a virtue in and of itself, then we should not care whether it benefits the public. For example, we do not explain the virtue of protecting human lives by the premise that it would benefit the society as a whole if we did not allow killing people. It is irrelevant whether the society benefits from that or not, since the human life is seen as a virtue worthy of protection. The same principle should apply to copyright, if it is indeed regarded under the natural rights theory.

Conversely, the proponents of wide public rights often mask their conception behind an attempt to create a “balance between promoting the public interest in the encouragement and dissemination of works of the arts and the intellect and obtaining a just reward for the creator (or, more accurately, to prevent someone other than the creator from appropriating whatever benefits may be generated).3.” Some have suggested that the “sole interest” of the government is to create a system that benefits the “society as a whole”4.. However, if this is true and if copyright laws are not primarily adopted to benefit creators, then, by implication, our only concern with creators’ interests is that such interests are not squelched to the extent that the resulting refusal of creators to create new works and make them available to the public, would actually harm the society more than the society would “benefit” from freely using someone else’s intellectual property. However, the provision of a bare minimum of food by a master to his slave, only sufficient for the slave not to die and to keep working, can hardly be called a “balance of interests”. In a way, this “balance of interests” in relation to copyright can be analogized with the state’s obligation to protect a person from having his property forcefully taken away, provided that such a person agrees to part with this property voluntarily.

Having noticed this inconsistency, but unable to untangle it, I looked up copyright laws of many countries. Invariably these laws are structured in a way to give authors an exclusive right to use their works as they please and to authorize others to do so. What does an exclusive right mean? It means a right to use the work to the exclusion of all others. Now, if governments were creating copyright laws for the benefit of the whole public, how is it that they did it by granting a monopoly to those who could severely limit the public's use of their works through the use of this very monopoly?

There are no other examples when the public benefit is ensured by providing a nearly absolute monopoly to a group that opposes the rest of the public. Governments did not create private property on land to benefit the homeless. Neither was the private property on crops introduced to benefit the hungry. If it was not the intention of governments to vest such a tremendous tool for control and monopoly in the authors, why are all such laws invariably written in a way that allows no other interpretation?

The mere fact that copyright laws are indifferent to the value of the works they protect (i.e. works receive copyright protection regardless of their artistic merit) should serve to disprove that copyright is created for the benefit of the public. If a work holds no value to the public, why would governments be concerned to grant the author of the work with a monopoly in respect of the work? Or is it just the opposite – that copyright should only protect works that nobody wants to use?

The next thing I did was I looked back at the history of the Soviet Union. It had copyright laws that, in fact, were written to benefit the public. Authors only had the right of first sale with no further right of control as to how their works are used afterwards. In vast majority of cases, it was the government that was the first buyer. Also, authors had the right to receive a “fair” remuneration for subsequent use of their works and the right to have their name mentioned every time their works were used. And, of course, it was the government that decided what was fair.

The Soviet model of “copyright” gave birth to many great works of art without vesting substantial rights in creators. It did not exactly result in all authors refusing to make their works available to the public. So I agree with those who don’t buy the argument that weak copyright will necessarily mean that people are not going to create. However, even a superficial analysis of the structure of creativity in the Soviet Union would reveal that it was based the following factors.

Authors received substantial benefits from the socialist government if they created what the government wanted them to create. That’s why there were so many operas, symphonies, cantatas, plays, stories and songs about Lenin and communism.

Second, the system abused authors’ love of the process of creation. When one is truly gifted, then the ability to create becomes more important than the urge to make a political statement by refusing to create. Many authors are forced to believe that their art is the only thing that they are good for. The socialist government offered creators a “deal” – they were allowed to create on the condition that they would have no right to control their works. By depriving authors of any say in how their works are used, the government punished authors for their virtue, for what they do best. This “deal” would have been impossible with those for whom the act of creativity is meaningless. This is very similar to how most countries today are punishing the rich for being so industrious. We tax them to death, but expect them to continue working because we know they love their work and because they are good at it.

Finally, the system would prevent emigration from it. Remember the Berlin wall? Remember Cuba? Remember the Soviet Union? Why is it so many people were risking their lives to emigrate? It was because the socialist government understands that as soon as a talented person is allowed to exercise their free will and to enjoy their freedoms, they will never go back to being spoon-fed by the government in return for giving up of these freedoms.

My father is a famous Russian composer who has composed music for over 100 movies. I asked him what it was that changed for him when the Soviet Union finally collapsed and Russia adopted copyright laws that were like most other copyright laws on the planet. From the creative point of view, there was not much difference. The only aspect that did change substantially is that the “true” copyright law provided a mechanism to control how the works are used, an opportunity to make decisions for oneself. The ability of the author to capitalize on this opportunity is a separate issue. This is the beauty of the free market system, in that it gives every one the right to fail and to succeed.

The Soviet system removed the element of opportunity. It was the government that decided for the authors what is a sufficient and fair remuneration for them. It was the government that decided what stories were printed throughout the country, what lyrics were put in songs and so on. The best example is how the Soviet censorship turned a song about an American cowboy into a song with no lyrics, thus creating what became a recent obsession, Trololo5..

The system worked ONLY as an integral part of the overall socialist nightmare. As soon as the socialist experiment reached its only possible result by destroying the country’s economy and, most importantly, the spirit of the people who live there, the government-fed copyright became unworkable. Free market economy (even its corrupted Russian version) cannot exist with the government telling everyone what and for how much they must create and license.

Today’s attack on copyright is simply one piece of the puzzle. The whole puzzle is the attack on free market and individual rights. The whole puzzle is the Great Socialist Evolution that has corrupted the Western world through various entitlement programs and indoctrination to the effect that the government can and should regulate everything and redistribute the wealth. The more entitlements people have, the harder it is to convince them that this model is unsustainable. Just as Margaret Thatcher said: “The problem with socialism is that eventually you run out of other people’s money”6..

Nothing that must be produced by another’s labour is a “right”. Housing is not a right. Health care is not a right. Use of someone else’s music is not a right. Let me illustrate this idea by the example of health care. If tomorrow all doctors exercised their free will and decided to quit, the government would have to enslave a group of people and force them to provide medical services that the government has determined is a “right” to all. In fact, this is exactly what was happening in the Soviet Union, where one went to jail if one was not employed.

Combining these pieces of the puzzle together, I realized that it is childish to only fight for stronger or weaker copyright laws. Copyright laws are nothing but a function of the political regime. Strong copyright laws cannot exist in a country that is giving away unearned entitlements to the undeserving and that is punishing those who create value for the country. Even the best imaginable copyright act (however subjective that may be) would not make a difference in this situation. If your car is falling apart, losing parts as it goes, it won’t be much help to install a new stereo in it.

I do not believe that anyone has a right to use another’s works without permission or in contravention of limitations that the copyright owner had imposed on their works. A man who creates something which had not existed before is free to pursue ANYTHING in return for it. He did not create the work for the society to determine the terms of how it is going to be used. He did not create the work for the enjoyment of the society. He created the work in an attempt to achieve his personal goals, be it the joy of a hobby, fame, goodwill, wealth or something else. It is up to the author to determine the terms on which he would allow the society to use his work. If he wishes to allow the public to freely use the work, nothing prevents him from making such a disposition.

But I hold this belief as part of my overall convictions that no one has a right to anything created by someone else. The dispute should be not about whether we need stronger copyright laws or whether we should be expanding exceptions from copyright. The issue is whether we are to subordinate individual rights to mythic “public interests” and the “benefit of society as a whole”. Copyright, as much as I love it, is just one card in the deck. I hope this article will help the readers better see the game that is being played with these cards and make their own decisions.

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